Question on ‘financing and committment’ clause - Posted by JamesDC
Posted by JamesDC on October 16, 2003 at 12:26:57:
In the purchase contract, it says the following.
“20. Financing Application and Committment: Buyer agrees to make written application for the financing as herein described within TEN 10 days from the date of contract acceptance. If written financing commitment is not obtained by Buyer within TWENTY 20 days from the Date of Contract Acceptance, Seller, at Seller’s election and upon written notice to Buyer, may declare this contract null and void and of no further legal effect, and all Deposits shall be disbursed in accordance with the Deposits paragraph of this contract. If Buyer has complied with all of Buyer’s obligations under this Contract, including those with respect to applying for financing and seeking to obtain financing, then the release of Deposits agreement shall provide that Deposits shall be return to Buyer.”
Is the buyer not required to show proof of financing to the seller? My question is then, how will the seller ever know whether or not the buyer has actually obtained financing by the 20th day? What good is this paragraph 20 clause if there are no specific wording requiring a written proof to the seller?
Can the seller still invoke the “Financing by 20th day” clause and back out
even if buyer is able to show proof but buyer simply forgot to provide a copy to the seller by the 20th day?